France’s statistics office INSEE confirmed on Friday that consumer prices rose 3.4 percent year on year in October, up from 3.1 percent in September, matching the provisional estimate published on October 30. Prices rose 0.4 percent on the month after falling 0.3 percent in September, and the harmonised index used for euro area comparison rose 3.7 percent year on year, a tenth below the 3.8 percent provisional figure.
Energy drove the acceleration for a fourth consecutive month. Energy prices were 24.1 percent higher than a year earlier, after 21.3 percent in September and 16.7 percent in August, with gas up 27.1 percent, petroleum products up 38.5 percent, diesel up 46.7 percent and liquid fuel up 69.9 percent. INSEE and Destatis both attribute the European energy price surge to the conflict in Iran and the Middle East.
The pressure was not only energy. Core inflation rose to 1.7 percent year on year from 1.5 percent in September, services inflation rose to 2.6 percent from 2.4 percent, with accommodation up 7.2 percent and insurance up 5.1 percent, and transport prices rose 7.4 percent year on year as airfares climbed 14.4 percent. Food inflation eased to 1.2 percent from 1.4 percent and manufactured product prices fell 0.2 percent year on year.
Set against Thursday’s euro area flash estimate, which put third quarter growth at 0.4 percent with France contracting 0.1 percent, the final French print completes an awkward combination for the ECB: a shrinking French economy with accelerating, broadening inflation, five weeks before the Governing Council’s December meeting.